FORM OF GUARANTY
FORM OF
GUARANTY
GUARANTY,
dated as of November 30, 2009 (this “Guaranty”), made by
the signatory hereto (together with any other entity that may become a party
hereto as provided herein, (each, a “Guarantor”), in favor
of the purchasers signatory (the “Purchasers”) to
certain Securities Purchase Agreements, dated on or after the date hereof, by
and among, inter alia,
Sino Gas International Holdings, Inc., a Utah corporation (the “Company”) and the
Purchasers party thereto (the “Purchase
Agreements”). Capitalized terms not otherwise defined shall have the
meaning set forth in the Purchase Agreements.
WITNESSETH:
WHEREAS,
the Company shall
issue and sell to the Purchasers, as provided in the Purchase Agreements, and
the Purchasers shall purchase up to Ten Million Dollars ($10,000,000) of the
Notes and Warrants (subject to a 20% over-allotment provision);
WHEREAS,
the Guarantor is the Chairman, Chief Executive Officer and largest shareholder
of the Company and will therefore derive substantial benefits from the issuance
and sale of the Notes and the Warrants; and
WHEREAS,
the Company has agreed to pledge 10,000,000 common shares of GAS Investment
China co., Ltd, a corporation organized under the laws of the British Virgin
Islands (the “BVI
Company”), representing all of the outstanding shares of the BVI Company
owned by the Company pursuant to a Pledge Agreement dated as of the date hereof
upon the expiration of the lock-up agreement pursuant to which such shares are
currently encumbered (the “Pledge
Agreement”).
NOW,
THEREFORE, in consideration of the premises and to induce the Purchasers to
enter into the Purchase Agreements and to carry out the transactions
contemplated thereby, each Guarantor hereby guarantees as follows:
1. Guaranty.
1.1 Guaranty. Guarantor
hereby unconditionally and irrevocably guarantees, jointly and severally with
any other Guarantor, the punctual payment, performance and observance when due,
whether at stated maturity, by acceleration or otherwise, of all of the
obligations of the Company under the Purchase Agreements, the Pledge Agreement
and the Notes (collectively, the “Obligations”) now or
hereafter existing, whether for principal, interest (including, without
limitation, all interest that accrues after the commencement of any insolvency,
bankruptcy or reorganization of the Company, whether or not constituting an
allowed claim in such proceeding), fees, commissions, expense reimbursements,
liquidated damages, indemnifications or otherwise (such obligations, to the
extent not paid by the Company being the “Guaranteed
Obligations”), and agrees to pay any and all reasonable costs, fees and
expenses (including reasonable counsel fees and expenses) incurred by the
Collateral Agent (as defined in the Pledge Agreement) and the Purchasers in
enforcing any rights under the guaranty set forth herein. Without
limiting the generality of the foregoing, Guarantor’s liability shall extend to
all amounts that constitute part of the Guaranteed Obligations and would be owed
by the Company to Collateral Agent and the Purchasers, but for the fact that
they are unenforceable or not allowable due to the existence of an insolvency,
bankruptcy or reorganization involving the Company.
1.2 Guaranty
Absolute. Guarantor guarantees that the Guaranteed Obligations
will be paid strictly in accordance with the terms of the Guaranteed
Obligations, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of
Collateral Agent or the Purchasers with respect thereto. The
obligations of Guarantor under this Guaranty are independent of the Guaranteed
Obligations, and a separate action or actions may be brought and prosecuted
against Guarantor to enforce such obligations, irrespective of whether any
action is brought against the Company or any other Guarantor or whether Company
or any other Guarantor is joined in any such action or actions. The
liability of Guarantor under this Guaranty constitutes a primary obligation, and
not a contract of surety, and to the extent permitted by law, shall be
irrevocable, absolute and unconditional irrespective of, and Guarantor hereby
irrevocably waives any defenses it may now or hereafter have in any way relating
to, any or all of the following:
(a) any
lack of validity or enforceability of the Notes or any agreement or instrument
relating to any Guaranteed Obligation;
(b) any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Guaranteed Obligations, or any other amendment or waiver of or any
consent to departure from the Notes, including, without limitation, any increase
in the Guaranteed Obligations resulting from the extension of additional credit
to the Company or otherwise;
(c) any
taking, exchange, release, subordination or non-perfection of any Collateral (as
defined in the Pledge Agreement), or any taking, release or amendment or waiver
of or consent to departure from any other guaranty, for all or any of the
Guaranteed Obligations;
(d) any
change, restructuring or termination of the corporate, limited liability company
or partnership structure or existence of the Company; or
(e) any
other circumstance (including, without limitation, any statute of limitations)
or any existence of or reliance on any representation by Collateral Agent or the
Company that might otherwise constitute a defense available to, or a discharge
of, the Company or any other guarantor or surety.
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This
Guaranty shall continue to be effective or be reinstated, as the case may be, if
at any time any payment of any of the Guaranteed Obligations is rescinded or
must otherwise be returned by Collateral Agent, any Purchaser or any other
entity upon the insolvency, bankruptcy or reorganization of the Company or
otherwise (and whether as a result of any demand, settlement, litigation or
otherwise), all as though such payment had not been made.
1.3 Waiver. Guarantor
hereby waives promptness, diligence, notice of acceptance and any other notice
with respect to any of the Guaranteed Obligations and this Guaranty and any
requirement that Collateral Agent or the Purchasers exhaust any right or take
any action against the Company or any other person or entity or any
Collateral. Guarantor acknowledges that it will receive direct and
indirect benefits from the financing arrangements contemplated herein and that
the waiver set forth in this Section 1.3 is
knowingly made in contemplation of such benefits. Guarantor hereby
waives any right to revoke this Guaranty, and acknowledges that this Guaranty is
continuing in nature and applies to all Guaranteed Obligations, whether existing
now or in the future.
1.4 Continuing Guaranty;
Assignments. This Guaranty is a continuing guaranty and shall
(a) remain in full force and effect until the later of the indefeasible cash
payment in full of the Guaranteed Obligations and all other amounts payable
under this Guaranty, the Purchase Agreements and Notes, (b) be binding upon
Guarantor, its successors and assigns and (c) inure to the benefit of and be
enforceable by the Purchasers and their successors, pledgees, transferees and
assigns. Without limiting the generality of the foregoing
clause (c), any Purchaser may pledge, assign or otherwise transfer all or
any portion of its rights and obligations under this Guaranty (including,
without limitation, all or any portion of its Notes owing to it) to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted such Collateral Agent or Purchaser herein or
otherwise.
1.5 Subrogation. No
Guarantor will exercise any rights that it may now or hereafter acquire against
the Collateral Agent or any Purchaser or other Guarantor (if any) that arise
from the existence, payment, performance or enforcement of such Guarantor’s
obligations under this Guaranty, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or indemnification,
whether or not such claim, remedy or right arises in equity or under contract,
statute or common law, including, without limitation, the right to take or
receive from the Collateral Agent or any Purchaser or other Guarantor (if any),
directly or indirectly, in cash or other property or by set-off or in any other
manner, payment or security solely on account of such claim, remedy or right,
unless and until all of the Guaranteed Obligations and all other amounts payable
under this Guaranty shall have been indefeasibly paid in full in
cash.
1.6 Maximum Obligations.
Notwithstanding any provision herein contained to the contrary, Guarantor’s
liability with respect to the Obligations shall be limited to an amount not to
exceed, as of any date of determination, the amount that could be claimed by the
Purchasers from Guarantor without rendering such claim voidable or avoidable
under Section 548 of the Bankruptcy Code or under any applicable state Uniform
Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or
common law.
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2. Miscellaneous.
2.1 Expenses. Guarantor
shall pay to the Collateral Agent and the Purchasers, on demand, the amount of
any and all reasonable expenses, including, without limitation, attorneys' fees,
legal expenses and brokers' fees, which they may incur in connection with
exercise or enforcement of any the rights, remedies or powers of the Collateral
Agent or the Purchasers hereunder or with respect to any or all of the
Obligations.
2.2 Waivers, Amendment and
Remedies. No course of dealing by the Purchasers and no
failure by the Collateral Agent or the Purchasers to exercise, or delay by the
Collateral Agent or any Purchaser in exercising, any right, remedy or power
hereunder shall operate as a waiver thereof, and no single or partial exercise
thereof shall preclude any other or further exercise thereof or the exercise of
any other right, remedy or power of the Collateral Agent or any
Purchaser. No amendment, modification or waiver of any provision of
this Guaranty and no consent to any departure by Guarantor therefrom, shall, in
any event, be effective unless contained in a writing signed by the holders of a
majority of the outstanding Notes or the Holder or Holders against whom such
amendment, modification or waiver is sought, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given. The rights, remedies and powers of the Collateral
Agent and the Purchasers, not only hereunder, but also under any instruments and
agreements evidencing or securing the Obligations and under applicable law are
cumulative, and may be exercised by the Collateral Agent and the Purchasers from
time to time in such order as they may elect.
2.3 Notices. All
notices or other communications given or made hereunder shall be in writing and
shall be personally delivered or deemed delivered the first business day after
being faxed (provided that a copy is delivered by first class mail) to the party
to receive the same at its address set forth below or to such other address as
either party shall hereafter give to the other by notice duly made under this
Section:
To
Guarantor, to:
Xx.00
Xxxxx Xxxx Xxx Xxxx Xx.
Xxxxxxx
Xxxxxxxx
Xxxxxxx,
P.R. China
Attention:
Xxxxxxx Xxx, Chairman and CEO
With a
copy to:
Xxxxxxx Xxxxx
Xxxxxxxxxx,
Xxxxxxxxxx & Xxxx XXX
0000
Xxxxx Central Xxxxx Xxxxx 0
Xx. 00
Xxxxxxx Xxxx, Xxxxxxx 000000, Xxxxx
Fax:
(00-00) 0000-0000
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To
Purchasers: To
the addresses and telecopier numbers set
forth in
the Purchase Agreements
With a
copy by telecopier only to:
To the
Collateral Agent:
Xxxxxxxxx
X. Xx Xxxxxxxx, Esq.
McMillan,
Constabile, Maker & Xxxxxx, LLP
0000
Xxxxxx Xxxx Xxxx
Xxxxxxxxx,
Xxx Xxxx 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Any party
may change its address by written notice in accordance with this
paragraph.
2.4 Term; Binding
Effect. This Guaranty shall (a) remain in full force and
effect until payment and satisfaction in full of all of the Obligations; (b) be
binding upon Guarantor and its successors and permitted assigns; and (c) inure
to the benefit of the Purchasers and their respective successors and
assigns. All the rights and benefits granted by Guarantor to the
Collateral Agent and Purchasers hereunder and other agreements and documents
delivered in connection therewith are deemed granted to both the Collateral
Agent and the Purchasers. Upon the payment in full of the
Obligations, (i) this Guaranty shall terminate and (ii) the Purchasers will,
upon Guarantor's request and at Guarantor's expense, execute and deliver to
Guarantor such documents as Guarantor shall reasonably request to evidence such
termination, all without any representation, warranty or recourse
whatsoever.
2.5 Captions. The
captions of Paragraphs, Articles and Sections in this Guaranty have been
included for convenience of reference only, and shall not define or limit the
provisions hereof and have no legal or other significance
whatsoever.
2.6 Governing Law; Venue;
Severability. This Guaranty shall be governed by and construed
in accordance with the laws of the State of New York without regard to
principles of conflicts or choice of law. Any legal action or
proceeding against Guarantor with respect to this Guaranty may be brought in the
courts of the State of New York or of the United States for the Southern
District of New York, and, by execution and delivery of this Guaranty, Guarantor
hereby irrevocably accepts for itself and in respect of its property, generally
and unconditionally, the jurisdiction of the aforesaid
courts. Guarantor hereby irrevocably waives any objection which they
may now or hereafter have to the laying of venue of any of the aforesaid actions
or proceedings arising out of or in connection with this Guaranty brought in the
aforesaid courts and hereby further irrevocably waives and agrees not to plead
or claim in any such court that any such action or proceeding brought in any
such court has been brought in an inconvenient forum. If any
provision of this Guaranty, or the application thereof to any person or
circumstance, is held invalid, such invalidity shall not affect any other
provisions which can be given effect without the invalid provision or
application, and to this end the provisions hereof shall be severable and the
remaining, valid provisions shall remain of full force and
effect. This
Guaranty shall be deemed an unconditional obligation of Guarantor for the
payment of money and, without limitation to any other remedies of the Collateral
Agent or the Purchasers, may be enforced against Guarantor by summary proceeding
pursuant to New York Civil Procedure Law and Rules Section 3213 or any similar
rule or statute in the jurisdiction where enforcement is sought. For
purposes of such rule or statute, any other document or agreement to which the
Collateral Agent or the Purchasers and Guarantor are parties or which Guarantor
delivered to the Purchasers or the Collateral Agent, which may be convenient or
necessary to determine Collateral Agent’s and Purchasers’ rights hereunder or
Guarantor’s obligations are deemed a part of this Guaranty, whether or not such
other document or agreement was delivered together herewith or was executed
apart from this Guaranty.
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2.7 Satisfaction of
Obligations. For all purposes of this Guaranty, the payment in
full of the Obligations shall be conclusively deemed to have occurred when
either the Obligations have been indefeasibly paid in cash or all outstanding
Notes have been converted to common stock pursuant to the terms of the Notes and
the Purchase Agreements.
2.8 Counterparts/Execution. This
Agreement may be executed in any number of counterparts and by the different
signatories hereto on separate counterparts, each of which, when so executed,
shall be deemed an original, but all such counterparts shall constitute but one
and the same instrument. This Agreement may be executed by facsimile
signature and delivered by facsimile transmission.
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BALANCE OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the
undersigned have executed and delivered this Guaranty, as of the date first
written above.
“GUARANTOR”
By:
_____________________________________
Xxxxxxx Xxx
This
Guaranty Agreement may be signed by facsimile signature and
delivered
by confirmed facsimile transmission.
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